The causal effect of education on wages revisited

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20 Citations (Scopus)

Abstract

This study estimates the return to education in Britain using two instrumental variable (IV) estimators: one exploits variation in schooling associated with early smoking, the other uses the raising of the school leaving age; both affect a sizeable proportion of the sample. Early smoking is found to be a strong and valid IV and unlike previous IV strategies uses variations in education at numerous points across the distributions of (i) education, and (ii) ability. Thus whilst still a ‘local average treatment effect’ the estimate is closer to the average effect of additional education, akin to least squares but corrected for endogeneity.
Original languageEnglish
Pages (from-to)477-498
Number of pages22
JournalOxford Bulletin of Economics and Statistics
Volume75
Issue number4
Early online date21 Jun 2012
DOIs
Publication statusPublished - Aug 2013

Keywords

  • poverty
  • work
  • justice

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